The paper, The Big Shortfall, revealed that investors suffered an average 4.9 percentage point annual return shortfall, with thematic funds offering an average annualised total return over a five-year period to 30 June 2023 of 7.3%, compared with an investor average of 2.4%. when the impact of cash inflows and outflows was considered.
The findings indicate that investors are “collectively poor market-timers” and particularly struggle in thematic funds, as the funds seem to induce more frequent trading and a tendency to buy high and sell low.
Morningstar said investors would achieve be…
